The Indonesian government is considering hiking royalties for IUP mines from 3-7% of revenue to 13.5%. We expect such an increase will raise cash costs by 9% and wipe out 20% of value from IUP mines. PTBA would be the worst affected of Indonesia's major producers with the value of the company's coal mines expected to decrease by more than US$1 billion. Ironically, PTBA is 65% owned by the Indonesian government. The rationale for increasing royalties is to boost government revenue from the...
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Insight | Jul 2013
Royalty increase would be another blow for Indonesian coal mines
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